Iris Energy Set to Become Leading Public Bitcoin Miner: Canaccord Raises Target

Canaccord has increased its share-price target for Iris Energy from $12 to $15, highlighting the company's potential to become a major player in the bitcoin mining industry.

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Key Highlights:

Higher Stock Price Target: Canaccord believes Iris Energy’s stock price could rise to $15, up from the previous target of $12, suggesting the company has strong growth potential.

Big Power Expansion: Iris Energy is building new facilities that will add 510 megawatts of power in 2024. They have already secured 2,160 megawatts of power and plan to add more in the future.

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Different Ways to Make Money: Iris Energy plans to earn money from more than just bitcoin mining. They will also use their infrastructure for cloud computing and AI services.

Changing Market Trends: The bitcoin mining industry is evolving. There’s a growing focus on using mining sites for AI and high-performance computing, which is influencing the market.

Stock Drop and Recovery: Iris Energy’s stock dropped 14% recently due to concerns about the suitability of their new site, but the stock has started to recover since then.

Key Advantages and Strategic Moves

Iris Energy, a Sydney-based bitcoin mining company, is well-positioned due to its ample power supplies and high-performance computing options. The company is making significant strides in the industry by building infrastructure that can be monetized for bitcoin mining, cloud computing, and AI colocation, according to Canaccord's research report.

Expansion and Power Capacity

The report notes that Iris Energy is set to become one of the most efficient and largest publicly listed bitcoin miners. The company is building 510 megawatts (MW) of data centers in 2024 and has secured 2,160 MW of power capacity, with a development pipeline exceeding 1 gigawatt (GW). This extensive power capacity is a significant advantage as the company scales its operations.

Market Trends and Comparisons

Mining stocks have seen a revaluation recently, partly due to Core Scientific's (CORZ) deal with AI cloud computing firm CoreWeave. This suggests that the market recognizes the potential for AI and high-performance computing (HPC) to provide profitable alternatives for bitcoin mining sites. JPMorgan's report last week echoed this sentiment, indicating that these opportunities could enhance the value of mining operations.

Challenges and Future Prospects

Earlier this month, Iris Energy shares dropped by 14% following a short seller's claim that the Childress site was unsuitable for AI or HPC hosting. Despite this setback, the shares remain below their pre-slump level of nearly $14 but showed a 1.6% increase, trading at $11.06 in early Wednesday trading on Nasdaq.

Canaccord remains optimistic, maintaining its buy rating and noting that Iris Energy's management is likely to leverage its infrastructure for multiple use cases beyond bitcoin mining. The company’s extensive power, cooling, and network capabilities position it well for future growth and diversification.

Monetization Strategies

Iris Energy's infrastructure offers several revenue-generating opportunities, including bitcoin mining, AI cloud services, and AI colocation. This diversification can help the company maximize returns on its investments and navigate the evolving tech landscape.

Also Read: New Ether ETFs Launch: Investors Cautious Compared to Bitcoin Success